MIRR Calculator computes the realistic return on investment by adjusting for financing and reinvestment rates, improving on the traditional IRR.
MIRR – Modified IRR Calculator
Compute Modified Internal Rate of Return using finance (cost of capital) and reinvestment rates for fixed or irregular cash flows.
Same cash flow each period for N periods.
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$
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Results
MIRR (per period)%
MIRR (annualized)%
Project Length (periods)
PV of Negative Cash Flows$
FV of Positive Cash Flows (at end)$
Initial Investment$
Total Inflows (sum)$
The MIRR Calculator computes the Modified Internal Rate of Return based on investment cash flows, finance rate, and reinvestment rate. It refines the traditional IRR by considering the cost of capital for outflows and the reinvestment rate for inflows, giving a more realistic view of project profitability.
Introduction
This calculator supports two modes: Fixed Cash Flow (same cash inflow per period) and Different Cash Flow (varying inflows by period). You can set Initial Investment, Number of Periods, Cash Flow per Period or detailed Cash Flow entries, along with Finance Rate and Reinvestment Rate per period.
The MIRR is computed as:
where n = number of periods.
How to Use the MIRR Calculator
Follow these steps to find the true rate of return for your investment project:
Select Mode
Choose Fixed Cash Flow if the same inflow repeats each period, or Different Cash Flow for custom inflows by period.
Enter Periodicity
Pick how often cash flows occur (e.g., yearly, quarterly). This sets the time base for the MIRR.
Input Initial Investment
Enter the total upfront cost as a positive amount.
Set Cash Flows
In Fixed Cash Flow mode, fill Cash Flow per Period and Number of Periods.
- In Different Cash Flow mode, list each Period and Amount separately.
Enter Finance Rate
The cost of borrowing or opportunity cost for negative cash flows.
Enter Reinvestment Rate
The rate at which positive cash flows are assumed to grow.
Review Results
The calculator automatically shows MIRR (per period), MIRR (annualized), and supporting metrics such as PV of Negative Cash Flows and FV of Positive Cash Flows.
Tip:MIRR vs IRR – MIRR assumes reinvestment at a defined rate (more realistic), while IRR assumes reinvestment at the project’s own return rate.
Frequently Asked Questions
MIRR stands for Modified Internal Rate of Return. It refines the traditional IRR by assuming reinvestment of positive cash flows at a specified reinvestment rate and financing of negative cash flows at a finance rate.
IRR assumes reinvestment at the project’s own rate of return, which can be unrealistic. MIRR instead uses user-defined finance and reinvestment rates, giving a more stable and realistic measure of profitability.
You must enter the initial investment (a negative cash flow), a series of positive cash flows (either fixed or varying), the number of periods, the finance rate, and the reinvestment rate.
Use Fixed Cash Flow when each period produces the same inflow. Choose Different Cash Flow when each period’s inflow varies, such as for uneven project returns.
A higher MIRR means better project performance relative to cost of capital and reinvestment opportunities, making it a key metric for comparing investment alternatives.
Negative cash flows are discounted to present value using the finance rate, increasing the denominator in the MIRR formula and reducing the resulting return.
Yes. A negative MIRR indicates that the project’s adjusted returns are insufficient to recover the initial investment when considering financing and reinvestment assumptions.
Methodology & Sources
The Modified Internal Rate of Return (MIRR) is a financial metric that addresses limitations of the traditional IRR by separating the rates for financing (outflows) and reinvestment (inflows). It provides a more realistic assessment of an investment’s profitability.
Formula
For a project with $n$ periods:
Where:
PV outflows = Present value of negative cash flows discounted at the finance rate rf
FV inflows = Future value of positive cash flows compounded at the reinvestment rate rr
Steps
Identify all cash flows CFt for each period t.
Compute
Compute
Apply the MIRR formula to derive the rate per period.
For annualization (if periods are not yearly):
Modes Supported
Fixed Cash Flow Mode: Uses uniform inflows per period.
Different Cash Flow Mode: Allows distinct inflows by period index.
Example
Given:
Initial Investment = $10,000
Cash Flow per Period = $2,500
Periods = 5
Finance Rate = 8%
Reinvestment Rate = 10%
Then:
Assumptions
Cash flows occur at period end.
Finance and reinvestment rates remain constant.
No interim withdrawals or additional investments.
Undefined for zero or negative PV outflows.
Rounding
MIRR: 2 decimals
Currency: USD, 2 decimals
Edge Cases
Division by zero if no negative cash flow.
MIRR undefined for all-negative or all-positive cash flows.
Extremely high or low reinvestment rates can skew results.
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